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Private equity has been scooping up life insurers that provide "permanent capital." Private credit has been financing the AI infrastructure build-out. Those two come together, and the result could be a bailout paid by state taxpaers, according to a fascinating new paper. I talked to the authors:
Private credit companies are key owners of AI-related assets. Many of their parent private equity firms own life insurers that are dumping grounds for bad loans—and subject to state bailouts.Instead of passing through bankruptcy, insolvent life insurers have all their liabilities—in particular the policyholder claims—paid for by state guaranty funds.prospect.org